Business Law Test 2

STUDY
PLAY
Some promises are not legally binding
True
Resolving whether a promise should be enforced is a function of contract law
T
A party's intent to enter into a contract is judged by their personal, subjective intent or belief.
If a contractual promise is not fulfilled, the person who made it may be required to perform the promised act.
F
If a contractual promise is not fulfilled, the person who made it may be required to perform the promised act.
T
The only requirement of a valid contract is that it be voluntarily entered into
F
Every contract involves at least 3 parties
F
"Consideration" Refers to the voluntary consent of all the parties to a contract.
F
One of the elements of a valid contract is a fair price
F
A bilateral contract comes into existance at the moment an offer is made
F
An offer to form a unilateral contract is accepted by a promise to perform
F
A contract can be created only when a promise is given in exchange for another promise
F
No offer may be revoked before it is accepted
F
Informal contracts are usually based on their sub¬stance rather than their form
T
An express contract must be in writing.
An express contract must be in writing
F
An implied contract is not an actual contract
F
Informal contracts include all contracts other than formal contracts.
T
In an express contract, the terms are fully stated in words
T
An implied contract is implied from the words of the parties.

An executory contract is one that has been fully performed.
F
...
F
An executed contract is one that has been fully performed.
T
If a voidable contract is avoided, the parties to it are released from it.
T
A void contract is enforceable if it is in writing.
F
An unenforceable contract is one that cannot be enforced because of cer¬tain legal defenses against it.
T
A void contract produces legal obligations on the parties but is not otherwise enforceable
F
A quasi contract is a true contract
F
A party who confers a benefit on someone else unnecessarily can invoke the principle of quasi contract to recover the cost
F
The doctrine of quasi contract can be used only when there is an actual con-tract that covers the matter in controversy.
F
Plain language laws regulate some types of contracts to require "legalese."
F
A reasonable, lawful, and effective meaning will normally be given to all of a contract's terms.
t
When the words in a contract have more than one meaning, they are cut from the contract.
F
An agreement is evidenced by a single event: an offer.
F
An offer must be practical to be effective.
F
An offeror must have a serious intention to become bound by the offer.
t
An invitation to submit bids—"how much would you charge to do this work?"—is an offer
f
An invitation to negotiate—"can you afford this?"—is an offer.
f
An expression of opinion—"your customers will like this"—is an of¬fer.
f
A statement of future intent—"I plan to sell my 700-pound sow"—is an offer.
f
A price list is an offer
f
An advertisement—"this property for sale"—is an offer.
f
An auction—"we ask you to bid on this item"—is an offer
f
A contract lacking a quantity term, when appropriate, may not be enforceable
t
An offer may invite an acceptance to be worded in such specific terms that the contract is made definite.
f
If no time for acceptance is specified in an offer, the offer terminates at the end of a reasonable time
t
A counteroffer does not terminate but continues an offer
f
An offeree's power of acceptance is terminated when the offeror dies unless the offer is irrevocable
t
An offer that a statute makes illegal automatically terminates the offer.
t
An unequivocal acceptance operates as a rejection of the original offer
f
No offer can be accepted by silence
f
An acceptance subject to new conditions implicitly rejects the offer.
t
If an offeror does not expressly authorize a certain mode of acceptance, then acceptance may be made by any reasonable means.
t
Under the mailbox rule, an acceptance takes effect at the time it is sent.
t
An e-contract must meet the same basic requirements as a paper contract.
t
Terms in a shrink-wrap agreement have been enforced in the same way as the terms of other contracts
t
Browse-wrap terms are often unenforceable.
t
Under federal law, an electronic document can be as enforceable as a paper one.
t
The UETA covers only e-records and e-signatures relating to a transaction.
t
The UETA does not apply to a transaction unless the parties agreed to conduct the transaction electronically
t
Contracting parties cannot opt out of the terms of the UETA.
f
The UETA applies to all writings and signatures.
f
An e-record is considered received under the UETA only if a person is aware of its receipt
f
To be legally sufficient, consideration must include something of economic value
f
A bargained-for exchange is one of the elements of consideration.
t
Inadequate consideration may indicate undue influence.
t
Normally, a court of law will not question the adequacy of consideration.
t
A promise to do something that one has a prior legal duty to do is not consideration
t
Unforeseen difficulties that justify a demand for additional compensa¬tion in-clude risks ordinarily assumed in business
f
Rescission is the substitution of one party to a contract for a third party, who agrees to assume the contractual duties
f
A promise to pay for an act that has already occurred is enforceable because the event is certain
f
An illusory promise is a promise that is enforceable without consideration.
f
An accord and satisfaction requires that the amount of a debt be certain.
f
A release does not require consideration to be legally binding.
f
A covenant not to sue is against public policy.
f
A covenant not to sue is the substitution of a contractual obligation for a legal action
t
The doctrine of promissory estoppel requires a clear and definite promise.
t
Contractual capacity refers to the legal ability to enter into a contract.
t
A minor may disaffirm a contract only after attaining the age of majority.
f
A minor may disaffirm a contract only if the subject matter is illegal.
f
A minor's right to disaffirm a contract terminates sixty days after the contract's date
f
Parents are ordinarily liable for the contracts made by their minor chil¬dren, even if the children acted on their own
f
A person who enters into a contract when he or she is intoxicated can void the contract if the terms are obviously favorable to the other party
f
A guardian can enter into legally binding contracts on behalf of a mentally incompetent person
t
A usurious contract involves the purchase and sale of usable goods.
f
If there is a statute that prohibits a certain action, a contract to do it is unenforceable
t
If the purpose of a licensing statute is to protect the public from unlicensed practitioners, a contract with an unlicensed professional is illegal.
t
A covenant not to compete is enforceable only if it is necessary to restrain trade
f
A covenant not to compete in the sale of an ongoing business is unenforceable.
f
Adhesion contracts are often held to be contrary to public policy.
t
An exculpatory clause in an employment contract is not enforceable if the clause is against public policy
t
An illegal contract is valid if the parties to it were unaware of the illegality.
f
A severable contract is unenforceable as a violation of public policy.
f